Members are under massive financial stress. To see medical premiums increase annually by more than consumer price inflation, is not easily accepted and members tend to downgrade at the end of the year as their current option can no longer be afforded.
Household budgets are already stretched to limits and medical aid is no longer affordable for everyone.
The higher increases are mainly due to high increases in service provider fees, a rising number of diseases, increasing of benefits, new medical technology, new medicine, the requirement to maintain reserves of 25% and benefit enhancements.
More members tend to join and remain on the scheme because they have an immediate need for the benefits, as opposed to joining another scheme and getting waiting periods.
On the bright side schemes can negotiate costs for instance with network providers to lower fees for certain services. They are not able to negotiate costs of medicines, as these are regulated.
If schemes can’t fund the increased expenses out of their reserve, they have to increase contributions to carry the costs.
Medical aid can form an important part of a family’s monthly expenses and premium increases are not taken too well. Maybe because schemes announce their increases towards the end of the year, at a time when you realise that the December holiday expenses are coming, it’s even worse.
Don’t change to another scheme or plan just because the premium increase of it is lower than your current option. To get the best value for your money, compare the benefits, exclusions, added value and service delivery and how it will cover your specific needs.